Are Skills a Constraint on Firms? New Evidence from Russia

20 Pages Posted: 15 Dec 2012

See all articles by Simon John Commander

Simon John Commander

London Business School; IZA Institute of Labor Economics

Irina Denisova

Center for Economic and Financial Research (CEFIR); New Economic School (NES)

Abstract

The paper uses a unique survey of recruitment firms to look at how Russian firms perceive the supply of skills in the labour market and how well those skills match to their demand for labour. Firms invest significant amounts of time in search to fill vacancies and search time is unambiguously increasing in skills. These skill gaps are associated with significant wage premia and are perceived to have negative consequences for the output mix and productivity. A small job postings experiment also finds that search time increased yet further for activities considered relatively innovative. Further, using Russian Ministry of Labour data for all legal migrant applications in 2010 and matching the migrant to the sponsoring firm, we find that there is some – albeit limited – evidence of firms using migrants to address high skill shortages. However, the overwhelming majority of migrants are skilled or unskilled workers; a reflection of the low underlying rates of innovation and associated demand for high skill jobs.

Keywords: job search, vacancies, skills

JEL Classification: J31, J61

Suggested Citation

Commander, Simon John and Denisova, Irina, Are Skills a Constraint on Firms? New Evidence from Russia. IZA Discussion Paper No. 7041. Available at SSRN: https://ssrn.com/abstract=2189779

Simon John Commander (Contact Author)

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Irina Denisova

Center for Economic and Financial Research (CEFIR) ( email )

47 Nakhimovsky Prospect, Office #720
117418 Moscow
Russia
+7 095 332 4083 (Phone)

New Economic School (NES)

100A Novaya Street
Moscow, Skolkovo 143026
Russia

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